stoozing on an off-set mortgage

keet83

I am coming to the end of my studies and am looking at buying a house (hopefully) later this year or early next. i worked out that it would probably be best to get an off-set mortgage. I have been stoozing with my student account, HBOS £3000 interest free , and am now wondering if i could do this with an off-set mortgage. i think i will have to wait for the egg card to be available again though.

just wondered if anyone had any advice or tips on this, or if there is another way to transfer the money without using the egg card?

Shimrod

Some of the credit cards like MBNA allow you to transfer money directly into a current account, so you only incur the one balance transfer fee.

Depending on the interest rate you get when you buy your house, you may find that offsetting via credit cards is a non-starter - that's certainly the case for most people on an offset tracker at the moment - from 1st Feb my mortgage rate will be 2.45%, but a typical BT fee is 2.98%.

If you only have a 5-10% deposit it may still be worthwhile, as quite a few of the trackers at this level have quite a big markup on the base rate e.g. BR+3.45%

LongTermLurker

Generally speaking, offsetting can be a good idea, especially if the mortgage rate is so much higher than the available savings rates. On the plus side, all "gains" are tax free (the gain is in that you've not had to pay interest, and it's tax free because it's a case of "not spending" rather than income.)

On the downside, flexible mortgages tend to be a bit more expensive (higher interest rates) than simpler mortgages, so some poeple question their real value. Also, avoid the temptation to put all your money into the offset account, because if the lender calls in your debt/goes bust, they are allowed to set off your savings against debts, meaning you'd have unwillingly paid off a chunk of capital and be left with no savings. Thus, assuming your debts are higher than your savings with the same company, the £50k FSCS rule doesn't apply.

That being said, with around 3% charge to get the free cash, you need to stooz quite a chunk for it to be worthwhile, and you'll always (at the moment) be worried that your lender could fail leaving you with no savings, a need to find a new mortgage and an unsecured debt to the CC company.

keet83

i've thought about possibly keeping my ISA going incase anything like that does happen. I would work out how long i needed to keep the 'borrowed' money in the account for it to be profitable. For example (using easy numbers):
3% of £10,000 would be £300, take £10,000 away from a £100,000 mortgage £90,000.
paying the mortgage 5%, instead of £5,000 interest it would be £4,500 +£300 charge on the credit card i would only be saving £200; if i was not paying anything else into that account for the 12 months.
I will need to work out what would be the cheaper option for a mortgage at the time also, maybe even a fixed account for 3 years or a discounted one if the BR gets so low.

radish293

We changed to the One Account in 2003 and cant believe how much money we have saved. I have also been using 0% credit cards to off set a chunk. The best being Virgin longest 0% and lowest monthly payment £25. only problem now is with the Interest rates so low and the Balance transfer fees there is little to be gained. my saving is only £10 per month. I have had to take out 2 separate cards to reach my Balance and making sure that i pay them both off on time is not so easy. Both Banks seem slow to send out a statement and appear to be deliberately attempting to make me miss a payment so they can charge interest. I think this will be my last Stooze its been a good few years.
My top tip. never, never, ever spend on your 0% card.:T and get an offset mortgage ASAP.

PS the One Account Customer service is Fantastic.

Desperate_Housewife_2-2

radish293 wrote: »

We changed to the One Account in 2003 and cant believe how much money we have saved. I have also been using 0% credit cards to off set a chunk. The best being Virgin longest 0% and lowest monthly payment £25. only problem now is with the Interest rates so low and the Balance transfer fees there is little to be gained. my saving is only £10 per month. I have had to take out 2 separate cards to reach my Balance and making sure that i pay them both off on time is not so easy. Both Banks seem slow to send out a statement and appear to be deliberately attempting to make me miss a payment so they can charge interest. I think this will be my last Stooze its been a good few years.
My top tip. never, never, ever spend on your 0% card.:T and get an offset mortgage ASAP.

PS the One Account Customer service is Fantastic.

I agree, I have done really well out of the stoozing and using the one account. i know it gets a bad rap on here but its been good for me (see sig )

I'm at the end of my stoozing life now and have to pay 2 more cards of in the next couple of months and then I think I'll knock it on the head, I've done it for years and getting sick of it now, its not as lucrative as it used to be what with BT fees and short life spans.

emili1001

1- I wonder if anyone has been using firstdirect offset mortgages.

My partner got approved a mortgage with C&G, but I am about to apply for the firstdirect offset one, since the interest rates are cheaper than the one account. It seems the best offset product to me, ..... Any suggestions or feedback?

2- I read the following at the stoozing guide:

"The highest amount at 0% I've ever heard of was £80,000 – netting that stoozer nearly £5,000 a year as the money was off-set in his mortgage."

So how can I (or my partner if I can't) build up +£80k in credit?. i.e. what determines the amount of credit that you are given in one CC and the number of CC you can have, ... other reasons?

Current situation:
I only have one edit card with £1650,
just started a PhD,
stipend of £13k/anum tax free.

I am able to get a mortgage because of my partner, as a student I would be declined.

Thanks in advance

:A1001:A

keet83

emili1001 wrote: »

1- I wonder if anyone has been using firstdirect offset mortgages.

My partner got approved a mortgage with C&G, but I am about to apply for the firstdirect offset one, since the interest rates are cheaper than the one account. It seems the best offset product to me, ..... Any suggestions or feedback?

2- I read the following at the stoozing guide:

"The highest amount at 0% I've ever heard of was £80,000 – netting that stoozer nearly £5,000 a year as the money was off-set in his mortgage."

So how can I (or my partner if I can't) build up +£80k in credit?. i.e. what determines the amount of credit that you are given in one CC and the number of CC you can have, ... other reasons?

Current situation:
I only have one edit card with £1650,
just started a PhD,
stipend of £13k/anum tax free.

I am able to get a mortgage because of my partner, as a student I would be declined.

Thanks in advance

:A1001:A

it all depends on how good your credit score is. the better your credit score the more they will offer you. this person could have had 8 different CC's meaning £10,000 overdraft on each. all companies work differently with your credit scoring; i have £500, £700 and a £1800 overdraft on my 3 CC's. I wouldn't try asking for an increase or another CC until i have finished my studies and have a secure job.

LongTermLurker

Bear in mind also that credit is being crunched at the moment and such limits won't be too readily available to new business. That 80K will have been built up over a number of years using several cards.

npw32jnw

I have a one account, and it comes with a Visa card - you just get the balance transferred onto this card and you don't need the Egg card to do the trick. I have £40k stoozing in my one account at present, and interest paid has come down from well over £500 pm to just over £200 - I know some of this is because of the interest rate cuts but even before these were kicking in, I was over £200 pm better off a month - better going off the lump rather than paying interest...

midnite

With the BT fees being so much higher than the mortage fees especially if you have a base rate tracker then looking at 0% purchase cards has to be an option. No fee and keep as much of you salary as possible in your offset.

I know in my current circumstance the BT fees are more than my mortage rate so fast stoozing is not an option beyond the end of my current deals so slow stoozing for me seems the only way to go.

I currently have a first direct base rate tracker.